theories of poverty

Theories of Poverty are the theories or schools of thought that seek to explain the causes of poverty. There are two main theories of poverty: individualistic theories and structural theories. The individualistic perspective generally considers poverty as a condition resulting from the shortcomings of impoverished individuals while the structural perspective trace the roots of impoverished conditions from the deficiencies in social structures and systems.

In the US, the prevailing line of thought is that poverty is caused by the individualistic theory due to the country being a meritocracy, under the incorrect assumption that all within the US have the same access to resources and same opportunities. In under-resourced and post-colonized countries, the prevailing line of thought is that poverty is caused by structural demographic vulnerabilities, labor market opportunities and how resources are distributed, often unfairly.

Within each of the two main theories of poverty are sub-theories.

In the individualistic theories of poverty, the sub-theories attribute poverty to individualism and is rooted in American values and belief in the free market system, a system thought to provide opportunity for all. The belief in individualism places much emphasis on individual hard work and responsibility to acquire basic needs including food, shelter and health care services are:

1.       Biogenic Theory

2.       Human Capital Theory

3.       Cultural Theory

In the structural theories of poverty, the sub-theories are:

1.       General Structural Theory

2.       Marxian Theory

3.       Restricted Opportunity Theory

Theories of Poverty: A Comparative Analysis

Theories of Poverty

Theories of Poverty/The Theory of Poverty - Hofstra University

Theories of Poverty and Anti-Poverty Programs in Community Development

Economic Theories of Poverty


Generational poverty

Generational Poverty is one of the six types of poverty.

Generational poverty is often exemplified by families who exist and operate in survival mode; consistently putting out fires and just trying to make it through to the next day.  Generational poverty is when poverty exists in a family for two or more generations and can be more aptly defined as poverty that is inherited across generations. It can affect every aspect of a person’s life: physical, social, emotional and mental. The concept of generational poverty can be traced back to Oscar Lewis, who coined the phrase ‘culture of poverty’ in his 1961 book ‘The Children of Sanchez’ to describe what he (incorrectly) assumed was a learned way of life, rather than a set of systemic hurdles that are more constant in certain geographic locations and experienced more prevalently by families who live in those areas and dealing with those systemic hurdles on a daily basis.

Overcoming the Silence of Generational Poverty

Breaking the cycle of generational poverty

Breaking Generational Poverty Is Harder Than It Sounds

Breaking The Cycle of Poverty, Two Generations At A Time

How Poverty Can Follow Children Into Adulthood

The Myth of the Culture of Poverty


Relative poverty

Relative poverty is one of the six basic types or concepts of poverty.

It refers to a measurement of physical and cultural needs against relative standards for a particular place and time. It’s a concept that typically refers to the phenomenon of relative deprivation or to an individual’s or groups lack of resources when compared with that of other members of their society—in other words, their relative standard of living. In technical terms, relative poverty is a condition where household income is a certain percentage below median incomes. For example, the threshold for relative poverty could be set at 50% of median incomes (or 60%). In common terms, relative poverty is generally used as one of the measurements for calculating income inequality and is commonly used in conversations (public policy and casual) to compare the living standards between a common group of people, including physical things they possess.

The concept of relative poverty was brought into public policy in 1964 by Republicans in a joint committee report with the office of the Presidency with the statement of “No objective definition of poverty exists... The definition varies from place to place and time to time. In America as our standard of living rises, so does our idea of what is substandard”, and made its way into more common usage by British sociologist Peter Townsend in 1979.

Relative poverty is a term most frequently used in when referring to those in industrialized countries who are poor.

There’s poverty in the UK, but are we better off calling it inequality

Relative Poverty - Intelligent Economist

What is relative poverty?

Minority [Republican] views, p. 46 in U.S. Congress, Report of the Joint Economic Committee on the January 1964 Economic Report of the President with Minority and Additional Views (Report). Washington, DC: US Government Printing Office. January 1964

Poverty in the United Kingdom: A Survey of Household Resources and Standard of Living - by Peter Townsend


situational poverty

Situational poverty is one of the six basic types or concepts of poverty.

It refers to a specific incident such as the death of an income earner (especially the primary income earner), a divorce, a major catastrophe (loss of employment, downturn in health, a house fire, loss of transportation for a significant period of time) or natural disaster (flood, tornado, wildfire and famine) that causes a person or family to experience a temporary level of poverty that they are able to get out of without long-lasting government assistance.

Situational poverty is most likely to be seen in those who have employment that is cyclical and with income that is irregular because of seasonal employment. It is also regularly seen in individuals and families of the highly educated who may experience a job loss for an extended period of time (often six months to a year), yet are able to regain their footing in a “middle class” or higher lifestyle simply by getting a new job, because that job will pay enough to return to a middle or higher income. Those in situational poverty often have family members that they are able to rely on for financial assistance and generally have a network of support (including prior savings and assets) to turn to other than or in addition to the government.

The concept of situational poverty was largely brought to the forefront by US author and educator, Ruby K. Payne in her book, A Framework for Understanding Poverty in 1995; however much of her work has been debunked as classist because it largely centered on the theory that children from poverty level households had an inherent learning deficit due to a ‘culture of poverty’, which is a theory that had previously been discredited.

Situational poverty is a term most frequently related to middle income-earners and those who are highly educated who experience a lack of income due to a specific personal situation, resulting in temporary poverty that generally has the potential to be resolved with a quick solution.  

Defining situational vs generational poverty  

Generational Poverty is the Exception, Not the Rule

Debunking Ruby Payne’s Framework of Poverty

Problematizing Payne and Understanding Poverty: An Analysis with Data from the 2000 Census


absolute poverty

Absolute poverty is one of the six basic types or concepts of poverty.

It refers to a level of poverty in which the individual lacks income or the minimum requirements needed for basic human survival such as food, water, shelter and clothing resulting in a person struggling to meet those needs or not meeting them at all.

The study of absolute poverty was pioneered by François Bourguignon and Christian Morrisson in 2002 in a paper that reconstructed measures of poverty going back to 1820. The pair studied population growth and income inequality and they found that up to a certain point, the industrial revolution helped millions get out of poverty. Around 1950 that began to change with more of the income once again being held by a few at the highest income levels.  The line that is used when measuring poverty globally across most non-industrialized countries is $1.90. Globally, this is the amount that keeps a person from being in absolute poverty, allows them to afford the basic necessities of food, shelter, water and clothing – in most non-industrialized countries.  This measurement typically does not apply to highly industrialized countries where levels of income are traditionally much higher than $1.90 a day, even for the poor in those countries.

Absolute poverty is a term that is interchangeable with ‘extreme poverty’ most frequently related to middle income-earners and those who are highly educated who experience a lack of income due to a specific personal situation, resulting in temporary poverty that generally has the potential to be fixed with a quick solution.  

Price Indexes, Inequality, and the Measurement of World Poverty - Bourguignon and Morrisson

Extreme Global Poverty, Our World in Data

How should we measure poverty?


rural poverty

Rural poverty is one of the six basic types or concepts of poverty.

It refers to a type of poverty in which the community or geographic area is not a city or suburb and it that lacks access to resources usually found in an urban or suburban location, in addition to having income below an identified threshold. Rural poverty is often the result of poor infrastructure that results in social isolation, limited access to education, employment and often to different methods of communication. Rural poverty is generally discussed in terms of spatial inequality, meaning a comparison of access to resources among similar income levels of different geographic locations within the same boundaries.

The concept of rural poverty was first used by the U.S. Census Bureau in 1874 to identify the poor living in communities outside of the large cities. Over time this became a difficult task to measure and by 1980, the U.S. government had stopped defining rural in concrete demographic terms and instead started to report rural as being any area outside of a defined urban or suburban area. Across the world, rural largely has the same definition as it does in the US, with rural poverty looking similar to that in the US in terms of the lack of access to infrastructure and related resources.

Poverty is highest in rural areas across the globe, including in the United States of America, where the highest concentrations of child poverty found in the rural parts of the Mississippi Delta, Appalachia and on Native American/Indigenous reservations, with Southwestern Arizona having the highest percentage of rural child poverty in the US at 36%. Similar to the US, rural poverty is seen in other countries primarily in farming areas with those who work but don’t own the land being farmed.

Report: Rural Poverty in America is ‘An Emergency’

Poverty in the rural United States

Rural Poverty in Developing Countries

Who are the rural poor?


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